The inefficiencies of venture capital funding

Chris Welter, Tim R. Holcomb and John McIlwraith

Journal of Business Venturing Insights, 2023, vol. 19, issue C

Abstract: Despite plentiful research into venture capital (VC), the process of obtaining funding still frustrates both VC firms and startups. While uncertainty is necessary for the returns that VC investors desire, there are inefficiencies in the process that stem from information asymmetry. We articulate those inefficiencies from both the founder and the VC perspective and offer some pathways toward reducing those inefficiencies to drive better outcomes for startups, VCs, and society as a whole.

Keywords: Venture capital; Startups; Fundraising; Information asymmetry (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jobuve:v:19:y:2023:i:c:s2352673423000215

DOI: 10.1016/j.jbvi.2023.e00392

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